US natgas output to hit record high in 2026, while demand holds steady, EIA says

By Scott DiSavino

NEW YORK, Feb 10 (Reuters) - U.S. natural gas output will rise to a record high in 2026, while demand will hold steady, the U.S. Energy Information Administration said in its Short-Term Energy Outlook on Tuesday.

EIA projected dry gas production will rise from a record 107.6 billion cubic feet per day in 2025 to 110.0 bcfd in 2026 and 111.2 bcfd in 2027.

The agency also projected domestic gas consumption will hold at 91.6 bcfd in 2026, matching the 91.6 bcfd record high in 2025, before easing to 91.5 bcfd in 2027.

The February projections for 2026 were higher than EIA's forecasts in January of 108.8 bcfd for production and 90.3 bcfd for demand.

GAS PRICES JUMP

EIA said in a report that gas prices rose sharply in January, averaging $7.72 per million British thermal units, as cold weather increased heating demand, reduced production, and led to record storage withdrawals during a winter storm.

The storage drawdown for the week ending January 30 was the largest weekly net withdrawal recorded in the history of EIA’s weekly storage report, the agency said.

EIA said it now forecasts gas inventories would end the withdrawal season in late March at less than 1.9 trillion cubic feet. That is 8% below the previous forecasts, prompting the agency's outlook for spot prices for February and March at the U.S. Henry Hub gas benchmark in Louisiana to be 40% higher than last month’s outlook.

“Winter Storm Fern caused significant short-term pressure on natural gas markets, but we expect higher prices in the near term will increase drilling, resulting in higher production later this year and helping to replenish storage,” EIA Administrator Tristan Abbey said in a note.

“Ultimately, this will result in lower natural gas prices next year than we had forecast. Our updated forecast anticipates Henry Hub prices will average $4.30/MMBtu in 2026 and $4.40/MMBtu in 2027, 5% lower than our January forecast,” Abbey said.

The agency forecast average U.S. liquefied natural gas exports would rise to 16.4 bcfd in 2026 and 18.1 bcfd in 2027, from a record 15 bcfd in 2025.

With power generators expected to burn less coal this year, the EIA projected U.S. coal production would decline from a two-year high of 533.0 million short tons in 2025 to 519.5 million tons in 2026 and 500.8 million tons in 2027, the lowest since 1963.

EIA projected carbon dioxide emissions from fossil fuels would decline from a three-year high of 4.913 billion metric tons in 2025 to a two-year low of 4.845 billion metric tons in 2026, as oil and coal use decreases, and a seven-year low of 4.818 billion metric tons in 2027 as gas and coal use decline.